What are you forking out in investment fees? Designers of new 'True and Fair' calculator claim they can tell you

Do you want to know how much in fees is being creamed off your investments? A new calculator will be launched shortly which promises to tell you exactly that - not just as a percentage of your overall investment, but in pounds and pence too.

It is the creation of Gina and Alan Miller, founders of investment management firm SCM Private, who also spearhead the True and Fair Campaign calling for transparent fund charges.

Their calculator - due for launch in April - draws on methodology already being used by American regulators that gives investors clear information on the total charges they can expect to pay.

What are you paying to fund managers? True and Fair Campaign claims hidden fees and charges are eroding returns by far more than most investors realise

Much to the frustration of investors, this seemingly crucial information is currently not available. Asset managers must give details of their set management charges but dealing, admin and other charges can add significantly to the cost. Funds already publish a 'total expense ratio' (TER) but critics say even this disguises the actual amount being taken.

The Millers believe hidden fees and charges levied by fund managers are eroding returns by far more than most investors realise, and say their calculator will reveal the real impact of these costs on individual portfolios.

Gina Miller says they feel so strongly about this that they have plunged £100,000 of their own money into developing the calculator.

'I thought we have got to get it - just do it,' she says. 'I just want it to be out there.'

The True and Fair Calculator is being modelled on one launched a few years ago by US regulator the Securities and Exchange Commission, which wanted American investors to see the fees they were paying on their investments.

HOW WILL THE TRUE AND FAIR CALCULATOR WORK?

You will be able to put in the name of a fund and get a figure showing the likely charge if you make an investment - for instance, on a £10,000 sum over 10 years.

The fee figure will appear as a percentage, or you will be able to see it in pounds and pence if you wish.

There will be the option to put in several funds at once - possibly three, although this has not been finalised.

The True and Fair campaign says the calculator will cover all the funds sold in the UK.

'Back in 2004, the SEC said it was unfair that investors in the US couldn't see the costs,' explains Miller. 'They said it was a basic right for the consumer to know these things.'

She says the officially-backed US calculator got a million hits in its first three years.

Miller thinks the True and Fair version will prove popular too, and is hoping it might even end up being adopted by UK financial watchdogs.

She is convinced investors want full transparency on investment fees and costs. Her campaign has carried out a survey that showed 92 per cent of UK adults were in favour of statutory reform to force disclosure of charges.

The research also showed that 74 per cent of investors wanted them displayed as a single, cash figure.

Miller admits the calculator will not be 100 per cent accurate, but thinks it will be close enough to become a valuable tool and certainly better than having nothing at all.

She claims it is necessary because fund managers currently understate their annual charges, which are commonly cited at around 0.75 per cent.

But 'hidden costs' come to around 1-2 per cent on top and amount to some £16.3billion a year, she estimates. Such costs can be hard to pin down, but administration, dealing, custody, and broker fees can all fall under this category.

Miller says a voluntary code on fees has been proposed by industry bodies the Association Of British Insurers, the National Association of Pension Funds and the Investment Management Association, but dismisses this saying it will not work unless it is compulsory.